Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

Board of Directors and Compliance Breakdowns

 The Fed sent public letters to the Lead Independent Director and the Board as a whole stating that their actions were ineffective and failed to correct compliance breakdowns  Board did not receive the right reporting on compliance issues; did not ask questions  Made aware of compliance issues and did nothing to investigate  Board did not have the right composition  The Fed’s Order still has not been lifted, and Board turned over

Takeaways

• Wells is an extreme case – But, the Board must be effective in properly overseeing compliance with laws and regulations • DOJ Sentencing Guidelines February 8, 2017: Compliance programs cannot be a “check the box” exercise and must be “effective.” • What happens in 2020? • Will the pendulum swing back to more regulation if there is a recession?